Lawmakers ask for probe into SRS

Kansas' attorney general promised Thursday to review a state agency decision providing extra Medicaid funds to a nonprofit group tied to the state Democratic Party chairman.

Attorney General Steve Six, a Democrat, sent a letter to Republican legislators who had asked Wednesday for an investigation. Three GOP legislators said Thursday they want to know whether the Department of Social and Rehabilitation Services "participated in Medicaid fraud."

SRS Secretary Don Jordan decided in October 2008 to provide an additional $713,000 to Community Living Opportunities Inc. for the budget year ending in June 2009. The Lenexa group provides services for the developmentally disabled, and Medicaid covers its care, with funds following individual clients.

Community Living's board includes Kansas Democratic Party chairman Larry Gates, a longtime ally of former Gov. Kathleen Sebelius, and a potential candidate for governor in 2010.

An SRS spokeswoman predicted Six's investigation will find no Medicaid fraud. Community Living's chief executive officer said it turned to SRS only because the funding system is flawed.

Spokeswoman Ashley Anstaett said Six's office doesn't discuss potential investigations, but she released his letter saying, "We will look into this issue."

Jordan has said the extra funds were justified because of the severe disabilities of Community Living's clients. But critics, including other providers, note SRS didn't follow the normal process.

Questions arose in March when Sebelius, a Democrat who appointed Jordan, was awaiting U.S. Senate confirmation as federal health and human services secretary. The HHS secretary oversees Medicaid. Kansas legislators had a hearing but didn't follow up.

Rep. Peggy Mast, of Emporia, one of the GOP legislators seeking the investigation, said if SRS violated Medicaid rules, Kansas could face paying federal penalties. She also said an investigation will encourage agencies to be careful in spending federal dollars.

"I just want to send a message to the agencies," said Mast, chairwoman of a House budget panel on social services. "I think it's probably better now than later."

SRS spokeswoman Michelle Ponce noted that, at Jordan's request, another agency commissioned an outside review. A report in May said Jordan had the authority to make his decision -- which SRS and others considered confirmation that no Medicaid fraud occurred.

As for Six, she said, "I'm confident he'll come to the same conclusion."

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